Industry | 2010.04.19
Doing the CEO sums | Peter Preston
David Cameron is reviving the past with his plan to limit public sector pay. But were we happier then?
Sometimes the ghost of times past comes back to land slap in present centre. Welcome, Sir Norman Payne . The retired boss of the British Airports Authority was 88 when he died last week and two decades out of the fray, but you could almost feel a sepulchral lip curling as David Cameron unveiled his plan to limit top public service pay to 20 times the lowest earnings in any particular enterprise.
Through the late 70s and early 80s, the editor of this paper (me) often got asked to big heavy lunches by big heavy men: the chairmen of Britain\'s nationalised industries. I took my labour relations correspondent along, because there was usually a strike in the works. We discussed a string of problems pending. But first – with Norman at BAA, Denis Rooke at Gas, Walter Marshall at Electricity, Robert Reid at Rail and many more besides – we talked about pay: for starters, the chairman\'s own packet.
This was an era when the titans of British state industry had annual take-home sums decided not by their in-house boards or by some arcane bonus formula, but by the Senior Salaries Review Body, a great and good bunch who handled MPs, ministers, judges and Sir Humphreys , too. Had Great Britain Ltd endured a dodgy trading year? Then Westminster and the Coal Board alike must show restraint. Were we in for another long series of nights at the Congress House? Then freeze salaries at gas, electricity and the rest pour encourager the TGWU not to cut up rough.
This did not make the chairmen anything less than formidable. Payne and Rooke were engineers who knew what they were talking about. Reid was a career railwayman in love with trains. Marshall was a scientist with a world reputation. They did what they did with conviction. Payne would have adorned any major public company with his drive and originality.
But how could such thrust and dreams turn on the dynamism when Whitehall\'s wet blankets doled out 2.3% all round to judges, generals and captains of industries? It couldn\'t. So along in 1980 came the Blessed Margaret in her You Turn If You Want To speech, getting pay review boards off nationalised backs. It wasn\'t open house, by any means. Nine years later, Marshall at the CEGB was on £111,000 and the chairman of the Post Office barely made six figures. Nevertheless, the market had a voice at last: and, as privatisations came along, that voice swelled to crescendo.
Too loud, too far? Certainly too unpopular at election time if you count the Royal Bank of Scotland as our latest state-owned jewel. But it\'s worth noting that Norman and the rest weren\'t driven by thoughts of feathering their own nests – just by getting an impossible mesh of differentials out of the way, by being able to manage, reward and recruit for themselves. And it\'s essential to register that the old pay league tables didn\'t bring union satisfaction or perfect industrial peace: rather the contrary. The more precise the "fair" dealing calculations, the louder the appeals to the ref.
Thirty years on, the Divine David has his "fair pay review" in the works. The 1:20 formula rules OK. Will we be happier, thus informed and constrained? Dear, bluff, brilliant Rooke would give a derisive laugh. And out in the boondocks of public opinion, you can even feel a countervailing breeze beginning to blow. Morrison\'s laments losing its CEO, Marc Bolland, to M&S because they wouldn\'t pay him the market rate. Britain\'s Premier League slips behind the Spanish and German leagues because it couldn\'t compete on cash. Unfair to football fans and lovers of decent groceries?
Cameron tells this paper he\'s about improving "cohesion and morale" in the public sector. He\'ll be starting a prices and incomes board next. Back to the future, where pigs could fly: though you had to build runways first.
For more information, please visit
http://www.guardian.co.uk/commentisfree/[...]ameron-public-sector-pay-limit
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